Tour of Alberta’s $1.6 million debt a bitter legacy for North American cycling

Steve MaxwellFebruary 28, 2018

Tour of Alberta leaves behind a massive $1.6 million debt with 80 creditors owed including many Continental and Pro Continental teams.

The end of the Tour of Alberta is another sad development for North American cycling, and particularly for Alberta. It’s also a big financial setback for the 80 creditors that are owed money as the race organization is $1.6 million (Canadian) in debt.

“It’s just tough, particularly in this kind of economic environment,” Scott Fisher, president of the race association, said. “We’ve had very strong support from a lot of parties, so we’re trying to take the high road here, and not throw anybody under the bus.”

Fisher did acknowledge that “unfortunately, some vendors are not going to be paid in full.” VeloNews obtained a copy of the bankruptcy filing for the Alberta Peloton Association, the holding entity for the Tour of Alberta, which was filed February 16 with the provincial court. In that document, the entity lists assets of $19,000 and liabilities of some $1.6 million.

Many prominent organizations are owed money: Hagens Berman Axeon, UnitedHealthcare Pro Cycling, Medalist Sports, Amore e Vita, the CPA, the Edmonton Cycling Club, the UCI, and World Triathlon Corporation. Even local/regional support organizations like hotels, provincial entities, television, and newspapers are listed among the 80 creditors. Unfortunately, it appears that a lot of vendors and supporters are going to get thrown under the bus.

Tour of Alberta’s (ToA) cancellation is just one more in a long series of North American professional bike races that struggle to survive longer than about five years. Like several legacy American races, regional government and state tourism entities originally funded the ToA, in an effort to promote travel and economic opportunities within the province. This was a similar model to the earlier Tour de Georgia and Tour of Missouri races, both of which were ultimately shuttered due to political considerations or changes. Initial reactions to the cancellation of the Alberta race pointed to similar and broader political challenges — primarily the depressed state of the oil and gas-dependent Alberta economy and the declining Canadian dollar.

The Alberta Peloton Association, owner and coordinating body for the race, said on February 15 that it had no choice but to cease operations. “There’s a change in economic times from when we started the race in 2013,” said Fisher. “And it’s a pricey event to put on and tour through the province. The funding sources we’ve traditionally relied on have decreased and, in some cases, dried up.” No doubt the tougher economic conditions made it more difficult for many companies or agencies to sponsor a bike race. But a look behind the scenes suggests that there may have been some other factors at play as well — internal frictions and some questionable earlier financial decisions may have hastened the demise of the event.

Originally the brainchild of Edmonton-based cyclist Alex Stieda — the first North American to wear the yellow jersey in the Tour de France in 1986 — and local businessman Jared Smith, the ToA started off to big fanfare in 2013, following an initial injection of $6 million from the Rural Alberta Development Fund, Alberta Tourism, host city rights fees, and commercial sponsors. At the time, Canadians were excited about pro cycling following Ryder Hesjedal’s victory in the 2012 Giro d’Italia . Hesjedal himself showed up for the first edition of the race along with six WorldTour teams, the likes of Peter Sagan, and eventual winner Rohan Dennis. The six-day event attracted huge crowds, particularly the start and finish stages in the province’s two largest cities, Edmonton and Calgary. Organizers tried to create a different marketing model with a festival environment, concerts and expos, and, according to the Alberta tourism minister, a TV audience of 30 million people in 140 countries. After a striking success the first year, the event had another good run in 2014, with an emerging Tom Dumoulin battling for victory in the final meters and South African Daryl Impey taking the overall.

By its third and fourth years, however, the ToA began to trail off, suffering from declining audiences, less participation by the top teams, and generally lower visibility. This was 2015, and Alberta’s largely oil and gas-dependent economy was in a slump, struggling under the pressures of low international energy prices. The provincial government changed hands in May 2015, with the incoming New Democratic Party more focused on provincial cost cutting. And by 2016, things were only worse. The Canadian dollar continued to weaken, with negative implications for vendors from outside the country. In addition, during that summer, northern Alberta had been consumed with one of the largest wildfires in Canadian history.

At that time, race executive director Duane Vienneau told VeloNews that the event was cutting out one of the more expensive mountain stages to save costs, but professed confidence that the race would return to the original six-stage format in 2017. However, the shortened race was less attractive to prospective sponsors, only fueling the downward spiral. Vienneau abruptly left the organization in mid-2017. Contrary to his prediction, the 2017 edition of the race was only four days, with the final two stages in the Edmonton area. Finally, the event was canceled in mid-February.

The Tour of Alberta’s public stance was that the race declined primarily due to the weak regional economy. Tough times led to declining sponsorship and smaller attendance. But various insiders tell VeloNews that it wasn’t that simple — that other things were going on behind the scenes that contributed to the event’s collapse. One person with inside knowledge of the situation said, “There were a lot of egos involved in this event from day one, and it worked against the success of the race. Early on, Calgary and Edmonton got sort of side-tracked with their ‘big brother/little brother’ rivalry thing. You know, Calgary had the Olympics, and so Edmonton was determined it was going to ‘own’ this event.” When Calgary officials decided to back out of the event in year three, it harmed the financial stability of the race, because Calgary, the province’s largest city, was home to much of the corporate support for the race.

Other poor decisions also hastened the race’s demise. The internal management staff and board had little firsthand experience with managing bike races and were consistently criticized for refusing to heed the advice or suggestions of more experienced outside contractors that they paid to put on the event. For example, the race organizers made a deal with the Alberta Treasury Branches (ATB) to be the title sponsor of the event but received only $350,000 Canadian in return. Most industry experts believed that payment should have been much higher. They also refused offers from outside experts to mediate the rift between Calgary and Edmonton. Finally, some suggest that the organization did not fully divulge the gravity of its financial condition prior to the 2017 race, bringing in teams and hiring contractors they knew they might have difficulty paying.

Rivalries within the management group gradually forced out key leaders who were critical to the success of the event. While few are willing to talk on the record, it’s clear that the way the event was handled has left a bad taste in a lot of people’s mouths — teams, participating cities, and contractors. Some major Continental teams refused to attend the event by 2017 because they had never been paid their previous prize money. “I will just say this. The way this whole thing was managed is just a travesty,” said one key participant, who didn’t want to speak on the record.

Most of these problems were likely irreversible when Vienneau abruptly left in mid-2017, leaving the challenge to Fisher who had previously been in charge of partnerships. The race went ahead in August, but shortly thereafter, other officials began to peel off as well. The BOD chair Peter Verheusen resigned in October. Once it became clear that the event could not continue, there was apparently a last-minute effort to find another buyer for the event — reportedly the Northlands Group, a regional operator of sports and entertainment events — but when its CEO quit in January, that effort was also unsuccessful.

When reached by VeloNews, Fisher reiterated the tough economic conditions within the province, and the well-known economic challenges of staging bike races anywhere. He acknowledges the significance of losing Calgary in 2015 but says that wasn’t a driving factor in the demise of the race. When asked if the organizing group could have done anything differently or better, he throws out a few ideas: “tighter budgets, a smaller event with fewer days of racing, a smaller field — those kinds of things might have helped. But without very strong regional support, like you see for example at the Tour Down Under, its hard sustain an event like this.”

Co-founder Stieda prefers to emphasize the positives, telling VeloNews, “Jared and I are very pleased that we were able to hold this event for several years and to have had the chance to show off our province to the world. I still have people come up to me all the time to say thanks for putting on a great event.” He also points to several other factors that conspired to make it difficult to sustain the event, in particular, the provincial budgeting schedules in April. “The local communities, as well as the corporate sponsors, typically had to make their budgetary commitments in January, but we never really knew for sure what the provincial agencies were going to do until April. That timing disparity meant we were always sort of chasing our tails around in a circle, and it made the whole sponsorship challenge a bit more difficult.”

Alex Stieda is a “glass half-full” sort of guy, and he believes there is a chance the race could be reinstated, perhaps under a different format, in the future. Given Canada’s strong recent performance in Pyeongchang, he says Calgary is laser-focused on a possible bid for the 2026 Winter Olympics. But when that is decided, Stieda hopes there will be a chance for all the key players to sit down together again and reestablish the bike race sometime down the road.

But for now, those 80 creditors — including some of cycling’s lower-tier teams that work on shoestring budgets — are simply hoping to get paid what they’re owed from that $1.6 million debt that is now the race’s unfortunate legacy.

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